Shared ownership to be expanded by government
The Prime Minister is set to announce an expansion of the government’s shared ownership scheme to allow an additional 175,000 aspiring homeowners to join the initiative.
David Cameron is expected to announce that restrictions that stop people using the scheme more than once will be removed, allowing those already in a shared ownership property to move to another.
What is shared ownership?
Through a shared ownership scheme, people can part buy and part rent properties while increasing their ownership over time, as and when they can afford it – this is called staircasing.
The changes mean that existing shared owners will be able to use the money accumulated from their first home to move to a bigger property.
Applicants can buy a stake of between 25% and 75% of the property, using a deposit and a mortgage. Rent of up to 3% is then paid on the remaining share which is owned by the local housing association.
The government will also remove rules that only allow those in certain professions such as key workers or those living in certain areas to have access to a shared ownership property. To be eligible for the scheme, individuals must earn below £90,000 in London and £80,000 in the rest of England.
Mark Hayward, managing director of the National Association of Estate Agents said: “It’s welcome news that the government is putting the proposed plans for expansion of shared ownership into action. By relaxing some of the existing restrictions, a potential 175,000 aspiring homeowners will be given the opportunity to own their own home, as well as allowing existing shared ownership homeowners the opportunity to step up the ladder.
“However, as with all housing promises, they can’t come quick, or big enough. There is still a huge issue with supply and available land upon which to build, not to mention the physical bricks, mortar and labour to do so. The house building industry is desperately short of human resource and if we are to get Britain building the number of new houses required, we need to address this problem to create actual homes and not aspirational targets.”